Investment Managers Discuss Macroeconomic Outlook and Opportunities in Asia for the Second Half of 2024

In the second half of 2024, HSBC and Invesco’s investment managers are optimistic about the macroeconomic outlook, particularly in Asia. Despite concerns about China’s growth and geopolitical issues, wealth managers believe that Asia offers robust investment returns and growth opportunities.

Cheuk Wan Fan, chief investment officer, Asia at HSBC Global Private Banking, highlights Asia as the most important growth engine of the global economy. With projected GDP growth and earnings growth for Asia ex-Japan in 2024 at 4.6% and 23% respectively, Fan sees Asia outperforming global peers.

While China has faced challenges in recent years, Fan expects the country’s latest property boosting measures to stabilize GDP growth at 4.9% this year. She holds an overweight view on equities in Japan, India, and South Korea, where she sees the best opportunities to tap into Asia’s structural growth themes.

Patrick Ho, chief investment officer, North Asia at HSBC Global Private Banking and Wealth, believes that the Hang Seng Index’s valuation remains attractive. He focuses on undervalued quality stocks in the Chinese service consumption and high-end manufacturing sectors. Ho also favors corporate governance reform winners in Japan, China, and South Korea.

Raymond Ma, chief investment officer, Hong Kong & China at Invesco, believes that the Chinese market has passed its low point since last November. He identifies Chinese companies that play a role in the reorganization of global supply chains and are crucial to the electrical revolution as potential investment opportunities.

In terms of income opportunities, HSBC’s Ho focuses on high yields from Asian investment grade bonds with five to seven years’ duration. He favors Japanese and Korean financials, Indian local currency bonds, Indonesian quasi-sovereign IGs, Macau gaming, and Chinese TMT credits.

Shekhar Sambhshivan, Indian equities investment director at Invesco, highlights the growth opportunities in India driven by demographics, manufacturing renaissance, and the country’s reputation as ‘The World’s Back Office.’

Overall, HSBC GPB expects the improving global economic cycle, broadening earnings growth, and central bank rate cuts to bring opportunities in quality bonds and equities. They have adopted a risk-on investment strategy with zero allocation to cash and overweight positions in global equities, US Treasuries, and global investment grade bonds.

In conclusion, the investment managers at HSBC and Invesco are optimistic about the investment outlook for the second half of 2024, particularly in Asia. They see opportunities in various sectors and regions within Asia, and believe that putting cash to work in bonds and multi-asset strategies can help generate stable income streams and portfolio diversification.